Anyone investing in STR in Niagara Falls?

Question

Hello everyone,

My business partner and I are considering buying in Niagara Falls as a short term rental investment and we'd love to speak to someone there running a vacation rental. Thanks in advance.

Carolina Solorzano.

Alexandra Helms · Answer

@Dziko Thunde Thanks for your reply! Full disclosure - I'm a local resident currently actively looking to move away.

If you have the ability to visit, I highly encourage you to do so! There's nothing like seeing for yourself what Niagara Falls, NY is like compared to Niagara Falls, Ontario. If you're looking to invest your hard-earned money, I'd also encourage you to actually drive through the areas designated as the STR zone. You can find the STR map on city's website. It's worth mentioning the STR regulations are relatively new, and I think some properties currently operating are basically grand-fathered with the old permit, and I don't know if being a new owner one'd be able to get a new permit if it's not in the designated location. But I really don't know, I'm not an agent or a lawyer, so please seek professional guidance, for sure!

Your question of "why such differences" has basically been my rhetorical one for years, haha. The difference is profound in so many ways when you travel across the border! Canadian side always feels vibrant and lively, US side always feels depressing coming back from Canada, not matter the time of the year.

I think there are many reasons, and some of them that come to my mind (subjective opinion) are:

1. Economy. Ontario is generally a more economically affluent place. I believe Niagara Falls, ON is part of the Greater Toronto metro, and there's a lot more going on there. You have higher population with a lot more economic opportunity. Some folks joke that Ontario is like Canadian California, especially when looking at housing prices. On the other hand, Niagara Falls, NY is a part of Buffalo-Niagara area, which is still struggling to find its footing and grow out of the "rust belt" characteristics.

2. Weather & Attractions. There are a lot more attractions and things to do on the Canadian side, including things that are indoors. On the American side, you pretty much just have the state park. The main attractions that draw most tourists including the Maid of the Mist and Cave of the Winds are closed for the season. Today, it is 24 degrees and wind chill, and it tends to be colder in the park and cold mist freezes certain areas of it to the point that they're closed for the season as well. Basically, all the things to do on the US side are best enjoyed in warmer months. The city doesn't do much in the winter for residents, let alone the tourists (besides the basics like snow removal). A couple of years back they even cancelled holiday lights traditionally displayed in a large local park. What does it tell you when a city can't afford to put a few structures with colorful lights for the holidays?

I'd say everything else is the consequence of the 2 points above - the weather and the state of economic affairs influences everything else, including safety, infrastructure, the condition of housing stock, etc. There are, of course, also things like politics and tax policies preventing the New York side from developing its tourism sector to be on par with Ontario...

I hope this helps! As I said before, I'm just a local resident, and this is just my subjective perspective and opinion. If I did set out to invest in the local area, I would scrutinize the numbers like crazy and be extremely conservative with my estimates. Because when it looks too good to be true, it is. I hope you do get a chance to visit, because despite all things, the falls are certainly a sight to see!

Andrew C. · Answer

I have an STR in Niagara Falls and it does pretty well based on the purchase price.  The winter months, it's pretty much empty but the summer months makes up for it.  I did get grandfathered in and the area where I bought is in a nice part of town.  I've considered areas close to the Falls, but sellers seem to price it a lot higher assuming the buyer can make it up renting it short term.  When I purchased my property, I had read all the exciting developments in the works...indoor waterpark, shops, new hotels, restaurants, etc., but was severely disappointed when I went recently with my family.  There have definitely been some upgrades in the park itself and there were some new restaurants/hotels and they did try to make the streets nicer.  While I didn't like feeling I was in Time Square on the Canadian side of Niagara Falls, the New York side felt completely dead.  There was also a large plot of land when it looks like something maybe in underconstruction but stopped....

I really do hope Niagara Falls revitalizes.  It has so much potential.

Dziko Thunde · Answer

Seems like you are taking too long on the aiming. You gat pull the trigger. Experience is another thing - it shapes and challenges the knowledge you acquired and you always find yourself wanting of knowledge because each day is a new day with different challenges and demands as is each deal. I wonder if people become experienced in real estate - unless they stop growing. With growth comes new challenges and new experiences. I think real estate investors in the game just become confident as to handle new challenges and they call that being experienced - Just like parenting: you think you are experienced with changing diapers, but the child is growing-kindergaten-grade one-baseball/soccer- soon teenage and the jazz goes on - grandparent

Dziko Thunde · Answer

I think the development of the place is in the vision of the leaders. Gettysburg PA is a very attractive place and attracts a lot of tourist that now many retired people have started buying houses to live there and the prices of houses have gone out outside the Downtown. When you are there, you don't think of it as middle-of-no-where but an exciting place with acres and acres of civil war memories but in fact it's just in the rural PA - fields and forests/game land. I wonder why Niagara NY can't take advantage of the tourism industry and be one of the richest Boroughs in NY. I once bought a house in Essington (Tinicum Township) - 5 minutes from Philadelphia Airport and I learn that the small Tinicum Township had a lot of income from the airport economy: hotels, crashpads, parkings etc

Alexandra Helms · Answer

@Dziko Thunde Thank you for asking. Sadly, I remain only an aspiring investor still, haha. Working on my financial fundamentals, namely saving enough free capital to invest. I've gathered more knowledge than I can implement with all the BP content and other materials, lol. I personally don't like the idea of using OPM as is often recommended for people without their own capital. So, it will be a long road for me.

Dziko Thunde · Answer

@Alexandra Helms Quite a quick reply and clear one too. Sad that NY isn't taking advantage of expensive hotels to get most of the US traffick to stay on US side and just do a day visit to Canada side and come back.

I don't know why small towns change their STR rules and make restrictions. Gettysburg, PA in (Nov, I think) 2021 changed rules for STRs. They designated certain streets not for STRs and others for STRs. That time I was looking at getting 201 S Washington (a 5 unit rental) and S Washington wasn't designated as STR and Gettysburg City said that I had to go thru the process of applying for zoning licence which is followed by a hearing with the neighbors as the jury who would hand me the verdict - yes/no.

I like analyzing markets and observing them for a number of months/years. And a local resident is usually very helpful. Thanks very much for your time and information. I'll definitely visit Niagara Falls. Heard lots about it since I was a kid.

In earlier posts you said you are an aspiring investor. How are you doing investment wise?

Joel Oh · Answer

Have you seen the price difference between a ghetto and a downtown in any major city? That is the difference. You don't need to visit the area to know this. Just Google Maps and see it from yourself. Often 3 blocks can make 2~3 times difference in the price.

Alexandra Helms · Answer

@Dziko Thunde

Here is a video published by a local agent (though I believe he actually moved out of the area) a couple of years ago that you might find helpful - "https://youtu.be/LPNIl_vLkWc?si=YIvGsOYgpS-buwek"

Dziko Thunde · Answer

My concentration for AirBnB is Gettyburg PA and Cape May NJ.

But just got fascinated with Niagara because I wanted to visit.

Gettysburg PA is an all year tourist place and Cape May iNJ s quite good for AirBnB. I'm still struggling to get my first AirBnB but values are rising, gross annual yield is mainly above 10%

Anyone investing in STR in Niagara Falls?

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